Monday, September 26, 2005

Independence of the Mexican Congress, redux

Recently, I suggested that legislative independence in Mexico is weakened by the branch's lack of access to information and the technical expertise necessary to independently formulate policy and/or propose alternatives to the executive's proposals.

Matthew Shugart has taken up the theme and insists that the legislative branch is able to act independently. As you might expect, Matthew points to the institutional incentives that legislators face, including several that I mentioned in my original post and comment thread. While I continue to agree that the institutional arrangements continue to make legislators highly responsive to the party, I think my main point is a different one.

(And, if I recall Joy Langston's paper presented at the UCSD conference, which I discussed at length with her privately, it's not always so clear who are the legislators' principals--sometimes it's the central party, but other times it may be the governors....and even then, there's not a perfect fit, but I digress.)

My claim is that the ability to independently evaluate or formulate policy in the legislature is hindered by two information problems: 1. access to information collected by the bureaucracy of the executive branch and 2. technical expertise to evaluate or process information. The first issue was mentioned in the newspaper article that led to my initial post; legislators could not get raw data from the executive about petroleum receipts and expenditures. The second issue is something I have witnessed first hand in the area of pensions, but it is related to the first issue.

Without information and the expertise to process it, legislators cannot formulate viable alterantives to executive proposals. Instead, their opposition must be based upon ideological stances without data or analysis to back them up. [Let me finish....] Yes, they do "oppose" policy, but often not effectively if they can't debate the information (because they can't get the raw data or don't have experts available to process the data) nor formulate an adequate alternative.

Let's use an example from a policy area that I know well: pensions. Pensions are data intensive and highly technical. To evaluate existing policy and propose new policies requires a lot of data. You need data on demographic factors including future projections, the implicit pension debt, and general models of economic growth, to name just a few types of data. Technical expertise (actuarial) is needed to calculate the life tables, risk premiums, and estimate the costs of current policy and proposed reforms. [As an aside, such expertise is scarce in Mexico.]

The administration has access to all of this data and the expertise necessary to formulate a proposal. The administration may, however, have an ideological preference for a certain type of reform. For instance, according to the technical data, a parametric reform may be cheaper than a privatizing reform, but since the administration prefers privatization on ideological grounds, the administration may choose to ignore that data and present data in support of privatization. [In an interview, a Mexican bureaucrat actually told me this happened with a particular reform.]

If opposition parties hope to prevent the privatization (even for ideological grounds), they need the data necessary to independently evaluate the claims of the administration, and they need the expertise to analyze the data to expose methodological problems or formulate alternative solutions. If they do not have the data or the expertise, they cannot effectively counter the claims of the administration.

Thus far, democracy is creating more access to the types of information and data that are necessary for policy-making in Mexico. There is now an equivalent to the Freedom of Information Act. However, as the article I originally cited makes clear, legislators still don't feel that they have access to all the information that they need. My point is that more transparency is still needed.

My other point is about expertise. Yes, the Commission for Social Security in the Chamber of Deputies has ONE actuary. That one actuary must advise the commission on pension privatization plans for at least two current pension debates: the ISSSTE and the IMSS workers' union. That one actuary is nothing compared to the teams of actuaries that work at ISSSTE and the Secretary of the Treasury that formulated the ISSSTE reform proposal, with additional technical assistance from the World Bank. That one actuary is nothing compared to the teams of actuaries at IMSS working on the workers' union pension plan analysis.

Yes, opposition parties can take an ideological/rhetorical stance against pension privatization, but they cannot fight claims about the costs of current policy or privatization options made by the administration in the press without the necessary data or expertise. This might mean that parties begin to devote more of their own resources to investigate policy options (by hiring their own actuaries, as some unions have begun to do), but if the administration keeps a monopoly on information, then having the technical expertise will be of no help. Clearly, legislators are also beginning to demand more data and transparency from the executive, which reflects not only a certain degree of current independence but will also increase future independence.

Based upon these observations, I still hypothesize that degree of legislative independence will vary across policy or issue areas, and that legislative independence will be weaker in highly technical or data intensive policy areas within the same institutional context. And, that last bit about institutional context is important, so I thank Matthew for pushing me on this point. Yes, the Congress is more independent now than it has ever been since the Revolution. On the other hand, I still think there is probably a lot of variation in that independence across issue areas.

In the future, I suspect that legislators will use their growing independence to demand more information and resources for policy making in the future, and this unevenness across policy areas will work itself out. The size of the independent policy office in Congress will probably expand. There is probably some analogous process (increasing need for data and expertise to formulate policy) that led to the creation of the GAO in the U.S., though that's not my area of research.